S. Florida Feels Flood Fallout

December 21, 1999|BY DOREEN HEMLOCK Business Writer

Businesses in South Florida scrambled Monday to cope with the fallout from deadly floods in Venezuela, the No. 1 supplier of oil products to the United States and a key trade partner for the Sunshine State.

At Miami International Airport, all airlines cancelled flights into Venezuela's top airport, located on the Caribbean coast down the mountain from the capital city of Caracas.

American Airlines said international flights into Maiquietia International Airport are suspended at least through Monday because of damage to roads in and out of the airport area. Some carriers diverted service to other airports.

Shipping lines also diverted vessels from the flooded port of La Guaira to secondary ports and took cargo overland. Venezuela-based King Ocean, which operates weekly shipping service from Port Everglades, said its offices in La Guaira had minor damage, but its shipyard flooded, with some containers left full of mud. "We have no idea when La Guaira will re-open," said sales manager Ciro Mendez.

Venezuelan business leaders in South Florida predicted the floods would prolong their country's deep recession, already the worst in decades, and could hurt South Florida's sales of computers, car parts, food products and other consumer items to the nation of 23 million people. Those sales top $1 billion a year.

"This sets Venezuela back. It paralyzes the economy," said Jose Daniel Carrillo, an executive at Venezuela's Banco Union in Miami and president of the Venezuelan-American Chamber of Commerce in Florida.

Even so, Venezuela's oil supplies to Florida and the United States should not be affected, because oil products come from an area not hit by floods -- in western Venezuela's Maracaibo area, executives said.

And for South Florida firms in construction-related fields, the disaster could spell opportunity. "Venezuela is going to need all kind of supplies to rebuild, and many of them will have to be imported," Carrillo said.

The disaster comes at a time when South Florida businesses already were reducing ties with Venezuela because of its recession and because of political uncertainty under its new president Hugo ChM-avez.

In the first half of this year, Florida's exports to Venezuela plunged nearly 30 percent, dropping by almost $600 million to $1.4 billion. Investor confidence is so shaken that billions of dollars of Venezuelan bonds have been trading at rock-bottom values, similar to Russia's.

On Monday, financial markets sunk even further, as the scope of the disaster became clear. The main index of the Caracas Stock Exchange fell 9.4 percent, its biggest one-day drop this year. And bond prices slipped by nearly 2 percent on a J.P. Morgan index of Venezuelan debt, Bloomberg News reported from Caracas.

For South Florida, business with Venezuela has been slipping so fast this year that some companies said Monday that flooding in the Caracas area had hurt them far less than one might expect.

Fort Lauderdale-based cargo airline Amerijet International, for example, already had stopped flights to Caracas and the industrial city Valencia long before the floods. The airline now serves only oil-rich Maracaibo and the tourist center of Porlamar, said senior vice president Pamela Rollins.

Beyond business, however, it was the horror of Venezuela's disaster -- thousands dead, and hundreds of thousands homeless -- that gripped executives on Monday.

"We're not used to disasters of this magnitude. The last major one was the earthquake of 1967, when some 200 people died," said Venezuela-born shipping manager Mendez. "When I spoke with my family in Caracas, they said the feeling is one of mourning. The streets are quiet. There's a sense of national grief."

Doreen Hemlock can be reached at dhemlock@sun-sentinel.com or 305-810-5009.